Tragedy and comedy in the UK – A short report

Yesterday’s pig heads, Corbyn-mania, Brexit or business as usual – Tragedy and comedy in the UK – A short report

Dear fellow travellers,

for an international meeting of like-minded rebels we wrote a short report about the situation in the UK. We had little time recently to systematically follow and discuss the wider developments, therefore it ended up as a bit of a selective cut-and-paste job – but people outside of the UK might still find it interesting. This is an update of two earlier papers on the crisis in the UK

Given the significance of migration for the UK economy and for the stratification within the local working class we will focus on the issue in a separate paper, which we will add in the comments section of this post. After the recent murder of the Labour MP Jo Cox the media tried to present the murderer as a ‘mentally unstable lonesome gardener’, while there is lots of evidence that he was a politically interested and connected person influenced not only by the extreme right, but first of all by the public ‘migration debate’. In this sense Jo Cox’s death is a collateral damage of the political class’s effort to channel working class anger against ‘migrants’ or ‘muslims’.

* Enough scandals and internal strive, but the government survived

To start on a superficial and personal level: the fact that Cameron survived his two main personal scandals, revealed to the public within a span of a few months, says something. People might not expect anything else from the ruling class, but that they fuck pig-heads together with their elite-peers and stash away daddy’s money in Panama tax havens. In addition the Tory Party had a few serious internal rows and set-backs: a back-bencher ‘revolt’ against Osborne’s benefit cut proposals (in-work benefits, disability benefits), with Ian Duncan Smith’s drama-queen type of resignation from his position as Work and pension Secretary; a re-treat on the question of education reform, which had originally planned to transform all primary/secondary schools into ‘private academies’; a clear division within the party when it comes to the EU referendum (Leave vs. Remain).

What counter-balanced this governmental internal crisis? Partly the even bigger internal division within the Labour Party since the election of Corbyn. More importantly some propagandistic measures, first of all the minimum wage ‘increase’ from £6.70 to £7.20 in April 2016, the ‘save-guarding’ of pensions (grey votes), but also the ability to manage the ‘steel crisis’ (Tata’s threat of closures) by a mix of protectionism and open-door policy for international finance to bid for take-overs. Finally the Tory government are still masters in securing low-wage migrant labour influx (record number of EU migrants in May 2016), while at the same time portraying themselves as the main force to be able to ‘stem the flood’. The main challenge from ‘working class side’ might have been the junior doctors’ strike in spring 2016, but it remained largely isolated even within the NHS and as it looks like the union leadership saved the government from a defeat by agreeing to a shitty deal.

* House of cards still standing: dependency on real estate bubble and financial market earnings, financed through increasing state debt

Despite IMF warnings the Bank of England continues with low interest rate policies in order to squeeze the last bit out of the housing bubble. During spring 2016 some of the main indicators (house price compared to average income; levels of personal debts) for over-heating edged close to 2008-crisis levels: in May 2016 the average UK house price was 6.1 times average earnings, close to the peak of 6.4 it hit before the financial crash. End of 2015 financial news reported that unsecured borrowing through loans and credit cards from Britain’s banks was rising at its fastest rate since before the financial crisis. Gross mortgage lending during the last quarter of 2015 was at its highest level since the summer of 2008. The increase in house prices also means that the government has to keep on subsidising rent payment through inflated housing benefit budgets (£25 billion annually). The by-product of this financial bubble is the expansion of the rent-sucking middle-class: the number of (registered!) landlords rose by 7% in 2013-14 to reach 1.75 million individuals, with a combined (declared!) rent income of £14.2 billion.

While keeping interest rates low the government pumped more money into ‘capital attraction’ by lowering corporate tax (from 28% in 2010 down to 19% from 1st of April 2017 and 17% by 2020), while the state deficit and debt grows despite of drastic austerity measures. During the end of 2015 the government had to reveal that public sector net borrowing (PSNB), rose by £1.1 billion to £7.1 billion. Total borrowing between April and October 2015 stood at £54.3 billion. While this was a decrease of £6.6 billion compared with the same period in 2014-2015, Osborne had forecast that borrowing would fall by £18.9 billion over the financial year. In total, the UK owes more than £1.5tn, equivalent to 80.5% of GDP (other sources claim that it is up to 90%). That compares with 69% in 2010/11 and 38% in 2005. The trade deficit is the highest of all EU member states.

* They have nothing else to do: austerity continues, increasingly outsourced to the council level

The fuckers in central government ain’t stupid. In chancellor Osborne’s spending review during the end of 2015 he announced “a revolution in the way we govern this country”, meaning, the central government drastically cuts spending for local government (40% of the budget till 2020, creating an annual ‘black-hole’ of £4.1 billion; council budgets will shrink by 66%), while at the same time they declare that local government has now more ‘fundraising power’ (they can keep 100% of business rates, compared to 50% previously, and increase council tax bills by 2%). The heat is on the local government. Out of our own experience we can say that the local government deals with this heat by going into hiding: in Ealing there is no housing benefit office anymore, everything has to be done online or via phone! There are lot of news about a general ‘social care crisis’ on the local level: number of people waiting to see a GP increased by 50%, numbers of Sure Start children centres came down from 3,400 to 3,000 within four years, number of adults provided with care by local authorities decreased by 500,000. Ealing Council has sold ‘our’ leisure centre to a real estate developer…

In addition to this outsourcing strategy the government secures itself a stabile strata of society (‘grey vote’) by safe-guarding pensions – at least formally. While pensions are exempt from the cuts and even Tory colleagues revolted over the attempt to attack ‘tax credits’ (low income subsidy, child support) and disability allowances (PIP) frontally, they continue to attack ‘minority groups’ within the working class: sick and disabled workers (500,000 on Employment and Support Allowance, which will be cut by £30 per week), people under 25 (no housing benefit entitlement, lower minimum wage), people with more than two children (child tax credit potentially only for two), EU-migrants (unemployment benefit only for six months; working tax credit only after four years), people dependent on housing benefit – basically the ‘other members’ of the average working class household.

Financialisation plus austerity results in a widening gap between rich and poor – surprise, surprise. The UK is already the ‘most unequal’ nation in Europe. In percentage terms, of the increase of wealth in the UK between the years 2000 and 2015, 26 percent went to the richest 1 percent, 600,000 people. The scale of Britain’s growing inequality is revealed by a report from Oxfam showing that the country’s five richest families now own more wealth/assets than the poorest 20% of the population.

* Give with the one hand, take with the other – Minimum wage increase in April

In London the drop in the real value of average earnings between April 2008 and April 2015 has been 23%, compared to 13% in the whole of the UK – the biggest fall of all G20 countries. In our area of London two figures dominate lives and conversations: how much do you earn and how much is your rent. For a 40 hour week on the minimum wage you get around £260. Between 2011 and 2016 rents in London increased by about 31%. For London as a whole average rents for one bedroom properties increased from £950 per month in 2011 to £1,250 in 2016. This means that many workers depend on additional benefits, mainly working tax credit, which is around £12 per week. Working families depend on housing benefit to pay the rent. In case of unemployment the housing benefit office in Ealing pays a maximum of £90 per person in shared accommodation, which means that you have to pay £30 out of your £70 weekly unemployment money on rent. This just as an introduction to explain the background of the minimum wage increase in April 2016, from £6.70 to £7.20 per hour.

First of all the government made a cheap propagandistic trick by labelling the new minimum wage ‘national living wage’, although the original ‘living wage’ (a benchmark set by various social institutions, charities etc., referred to by many companies and local authorities) is £8.25 outside and £9.40 inside of London. Around 6 million workers in the UK are supposed to earn less than this. For them the increase of the minimum wage might have had some significance, whereas for the estimated 1.7m “self-employed” (out of 4.6m “self-employed”) who are low-paid, it didn’t mean much, because they are not covered by it.

The problem is that together with the minimum wage other payments or deductions also changed, e.g. a current gross wage of £7.50 leaves you with £6.55 after deduction of national insurance contributions and tax, which is not much more than you had when the minimum wage was gross £6.50 and you had hardly any deductions. More from personal experience it also seems that housing benefit payments or even working tax credits decreased slightly over the last four years. So in the end the minimum wage increase is more of a re-shuffle between government and companies: who pays how much for the reproduction of low wage workers. Many companies reacted to the increase of the minimum wage by an initial cut of working hours, cuts of ‘extra bonuses’, f.e. for weekend work or over-time, or other voluntary company perks. Those companies like Lidl or M&S (retail) who have recently and loudly announced that they pay the actual living wage also cut other bonuses to counteract the increase of the basic rate.

There are three main ’legal’ forces pressurising workers to bear the low wages: a) their national status; migrants have less access to unemployment benefits or have to keep jobs to satisfy the migration office; b) their work contract; over 800,000 workers in the UK are on zero-hour contracts, which seems to make it easier for bosses to punish troublesome workers; c) generally more hassle for unemployed; according to a recent study of those unemployed for 12 months up to April 2014, 16.7% faced a financial penalty; the figure for the previous year was 14.8%.

These forces also contribute to the fact that workers work more unpaid overtime and accept ‘wage theft’: in 2015, UK workers gave their bosses £31.5 billion of unpaid overtime, that is 5 million workers working 7 hours per week extra, according to the TUC; according to Citizens Advice, numbers of workers who approached them to seek help with wage theft nearly doubled from 4,900 in 2014 to 9,000.

All in all ‘wages’ are a quite big public issue, but low waged workers are still largely portrayed as people who are in need of charity. There are only few offensive struggles – see paragraph on strikes below.

The EU-referendum becomes a field to channel and externalise the various social tensions produced by the crisis and austerity – with the main focus on the EU-migrants (and ‘threat’ of refugees via EU-Turkey treaty). It is not as clear-cut, but the social-economic division between proponents for Leave vs. Remain could be discussed as following:

Remain
– lobby of multi-national corporations and corporations engaged in foreign trade relations, e.g. the remain campaign is run by (ex-)bosses of Sainsbury’s and M&S (retail chains)
– parts of big banking, e.g. the Bank of England
– metropolitan professionals

Leave
– certain sectors of London stock-market, in fear of EU regulation
– small business and manufacturing, e.g. Midlands Industrial Council
– larger parts of local working class

The rough division in terms of arguments is that the Remain faction says that the UK will lose jobs in sectors related to EU trade or dependent on EU investment (4 million) and the Pound will lose 20% of value in case of Brexit, while the Leave campaign says that local workers lose jobs due to the influx of migrants from the EU (2.2 million) – annual net migration of 250,000 for next 20 years. In relation to the NHS crisis the Leave proponents claim that the £350 million weekly transferred to the EU could be spent on the NHS, while Remain spokesperson Jeremy Hunt – who is at the same time the leading face of re-structuring and ‘privatisation’ of the NHS – states that without the 100,000 EU health workers the UK health system would collapse. In the public debate the other reasons for the ruling-class internal dispute, e.g. monetary considerations of Pound vs. Euro, stock-market competition, relation towards the US, are in the background, while the migrant question is pushed into the foreground. The government uses this in order to impose further benefit cuts and dividing lines between local and migrant working class. The main phantom in the anti-migrant propaganda is the claim that “Turkey will join swamp England and even before joining 1.5 million Turks will be able to travel visa free” – Conservative minister Priti Patel in particularly targets ‘anti-muslim’ UK Hindu votes.

During early June, when polls showed a leading Brexit vote, the Pound swung wildly on currency markets, reaching extremes of volatility not seen since the financial crisis. The financial pages made it bigger news that German 10-years sovereign bond yields went negative – meaning that investors theoretically pay (instead of receiving interests) to keep their money in a ’safe haven’.

* A hotchpotch stage show: the ‘nationalisation/financialisation’ of Tata Steel

The ‘steel crisis’ reached a public peak in early 2016 – earlier on SSI’s Redcar steel plant closed down in October 2015, with 2,200 job losses, followed by Caparo’s facilities, with 1,700 redundancies. Now the bankruptcy sale of Tata Steel was in the focus, threatening 15,000 jobs directly and further 25,000 at suppliers – Tata has 12 factories, these include Port Talbot (4,100 workers), Llanwern and Newport (1,314) and Shotton (727), all in Wales; Rotherham (1,235) and Stocksbridge (831), in South Yorkshire; and Hartlepool (500). This does not sound an aweful lot, compared with, e.g. lost jobs in banking after 2008, but when it comes to the steel there are at least three more political factors which come into play:

a) steel is seen as a ‘national industry’ and even the trade unions unions and Labour Party remind us that national defence needs national steel; Chinese steel dumping, Indian management or EU regulations could be blamed for the crisis
b) the dispute showed clearly how divided the country is, with London as the national money machine, often justifiably portrayed as causing the under-development of other regions, in particular Wales and the North East;
c) the government has boasted big time that it will ‘revive’ manufacturing in the UK, knowing about the instability of the FIRE sector, so it was obliged to react; since 2008 around 385,500 jobs got lost in manufacturing

The reaction of workers was tame, at least that’s what it looked like in the media: demonstrations calling politicians to ‘Save our Steel’. The trade unions offered wage cuts and called the government to do their share through (part) nationalisation. The government’s business secretary finally announced that the state would take over a 25 per cent stake of the biggest plant in Port Talbot, while Tata considers to keep the plant open – after both state and unions butted in. Another deal was found for the Scunthorpe plant: Greybull Capital bought it for a symbolic £1. Greybull was set up by an ex-Lehman Brothers banker. It specialised in “sweating the assets” of troubled businesses. For instance, it bought the charter airline Monarch for a pittance. Workers were blackmailed into taking a 30% wage cut and losing 700 jobs.

The brokered deal seems in line with the objectives of the government: it can show itself in a patriotic light and ‘workers’ friendly’ and at the same time delegate further responsibilities to the financial sector, including for the pension scheme: the British Steel Pension Scheme (BSPS), which was inherited by Tata has £14.5bn of liabilities, making it one of the biggest pension schemes in the UK.

In the meantime the main ‘steel consuming’ infrastructure programs (Crossrail train line and airport expansion of either Heathrow or Gatwick) are pretty fucked up, Crossrail has inflated its budget enormously and the airport expansion got stuck in political mire.

There have been a few other major cases of bankruptcy during the last half a year, most prominently the collapse of the retailer British Home Stores threatening 11,000 jobs. The whole story sounds pretty representative for UK-neoliberal wheelings and dealings: in 2000, Sir Philip Green bought the company for an estimated £200 million. In 2005, BHS’s holding company Taveta Investments Ltd paid out £1.2 billion dividend, no one knows how. Green has since pocketed over £586m from BHS in dividends, rental charges and interest payments. The company ran down and he sold it for £1 in 2015 to Retail Acquisitions, a ‘consortium’. They declared BHS being bust a year later The near 20,000 (ex-)workers and members of BHS’s two retirement schemes will now likely enter the Pension Protection Fund (PPF) – a government-backed lifeboat for failed pension schemes.

* Internal and external policing

The Paris attack helped the repressive arm of the state in the UK to get out of the defensive corner, after at least three public defeats within a few months: the cops had to officially apologise and compensate female activists who had been tricked into relationships with undercover policemen; many of the workers and trade unionists who ended up on black lists of construction companies during the 1980s and 1990s got compensation and the involvement of the police in helping to establish the black-lists became a public issue; the most important defeat in terms of public attention was the case around Hillsborough football disaster of the late 1980s, where it is now official that the police created the situation that led to 96 deaths, resulting in a charge of unlawful killing.

At least propagandistically referring to the Paris bombing Home Secretary Theresa May published the Investigatory Powers Bill (IPB) in March 2016: Internet Service Providers (ISPs) will have to keep records of the browsing history of everyone who accesses the Internet for a period of 12 months. State security forces will have the power to access this data unhindered. In June 2016 the House of Commons voted last week by 444 to 69 in favour of the bill, meaning that most Labour Party MPs voted in favour.

As an external operation, the UK parliament voted in favour of bombing Syria less than one month after Paris. This time Cameron got a majority: the support provided by 66 Labour MPs meant that the government motion was carried by 397 to 223, a majority of 174. This vote is only subsequently formalising interventions in Syria: in November UK Royal Air Force drones executed ‘Jihadi John’, a UK citizen in Syria, just two months after two other British citizens in Syria were ‘drone killed’, blurrying the lines between internal and external, military and police operations. Similarly blurry is the sending of a UK Navy battleship to the waters in Libya in May 2016 to ‘detain human traffickers’. While actual numbers of soldiers might be shrinking, the military budget increased, both for expensive hard-ware (£80 billion for nuclear submarines) and software (special intelligence and SAS troops).

A bit of random symbolism: London has been Europe’s capital of CCTV cameras, now austerity seems to undermine this status. In June, Westminster Council said it is facing “significant financial challenges” due to reductions in central government funding and announced to scrap 75 central CCTV cameras, claiming that they don’t do much to prevent crime. At the same time the outsourcing to of prison management to private companies like G4S has hit a certain crisis point: after 18 years and scandals of violence and neglect the Ministry of Justice took over the management of a G4S-run child/youth jail in Kent in May 2016.

While the mainstream left addressed the issue of intervention in Syria through the usual demonstrations, there was less engagement with more arbitrary cases of violence, e.g. the death of a young women in prison in London in February 2016 who had previously been victim of police brutality when arrested for theft; the fatal stabbing of a Muslim in Glasgow by an ‘islamic fundamentalist’ in March 2016, who accused the shop-keeper to be too ‘western’; the police killing of a men in Bedford in May 2016 during ‘drug-related’ arrest. The many deaths and suicides in prisons and mental ‘hospitals’ (increase of 20% over the last three years), is a largely hidden crisis.

* Strikes and Struggles

Sometimes it is good to just write down a random list of those struggles of the last half a year which we remember spontaneously, representative of those struggles which made it into your inbox or into the public media and consciousness.

* a rowdy mass protest of disabled people, who stormed the central lobby of parliament in March; since the protests against ATOS (private company which used to assess whether people are ‘fit for work’) it seems that there is some genuine mobilisation amongst the disabled, which is not the case with many other ‘anti-austerity protests’
* teachers’ protests around the issue of the government White Paper (within two days 140,000 teachers signed a petition of protest), which forced the government to backtrack on the ‘academy-isation’ of schools
* lame steel workers marches
* strike of the junior doctors in April

The last example got most of the public attention and would deserve a whole article. First of all we can say that there have been many smaller and harder struggles within the NHS (ambulance drivers, cleaners), which received little to no attention. It takes the ‘gods in white’ to walk out, in order to impress the public. They walked out over payment for weekend-shifts and ‘unsocial’ working hours The one/two-day all-out strike of around 45,000 junior doctors were the first stoppages in the history of the National Health Service (NHS) to be held without emergency care being provided. 78 percent of doctors did not show up for work. At least our impression was that other hospital workers (nurses, admin, porters etc.) were sympathetic, but not actively supporting the strike. The doctors addressed the NHS crisis from their professional perspective (‘we can’t work well if we are tired’), but also did not actively try to bring ‘all NHS workers together’. The government attacked them hard in the media, some claiming that the dispute had a similar political symbolism like the miners’ strike, but in the end BMA trade union leadership and government came to a compromise – which many doctors seem to see as a sell-out of their initial demands. Given this outcome it is not clear whether the courage of the doctors to walk out will inspire less professional workers in the health sector, or further dampen the mood.

So far the ‘big’ struggles, which got more press coverage. Then there are a few struggles which we found important politically:

* smaller direct actions to prevent cops from arresting migrants during raids; attempts to stop deportations at the airport plus regular protests in front of detention centres; many of these protests are led by ‘former asylum seekers’ or ‘detainees’
* organising efforts and succesfull wage campaign of (bike) couriers in London, organised by the rank-and-file union IWGB
* in (refusing) reference to the so-called ‘Polish Strike’ (an online-gimmick, largely organised by nationalist forces) some groups of ‘migrants’ started organising themselves, e.g. in form of the Migrant Pride in Edinburgh
* occupation of a library in south London, largely by local people; the authorities wanted to close it down and turn it into a gym
* demonstrations by student nurses against the cuts of bursaries, which would mean that normal university fees (up to £8,000 p.a.) would apply for studying to become a nurse; demonstrations were organised mainly through social media by student nurses, but reached mass level
* small wage struggles hardly anyone hears about, e.g. by recycling workers near Bristol, hospital cleaners in south London or ready-meal factory workers in Sheffield

All these struggles remain pretty local, but they address very general problems ‘from the bottom up’. If organisational forms could be developed which create bonds between wage struggles, take-over of public buildings/services, anti-raid actions etc., these struggles could get some traction and formulate a wider perspective. Instead of trying to debate and establish these type of organisational forms large parts of the Left formulate ‘general demands’ – in direct or indirect reference to the state – as a strategy to go beyond isolated conflicts. The Corbyn-mania and the return of the parliamentary ‘Labour’-illusion has to be seen against this background.

* Corbyn Mania – The Left drama

We don’t know much about the internal dynamics of ‘Momentum’, the Labour Party rank-and-file organisation which evolved out of the membership surge after Corbyn’s election as candidate. The membership increase is not unimpressive, Labour’s membership stands now 388,103 – up 194,349 on the 2014 figure and the largest number since 1998. Most of these new members won’t be ‘classic working class’, but more likely ‘lower paid professionals’. Momentum tries to present itself as a grass-roots link between anti-austerity struggles etc. and the parliamentary level – but actually one sees little of Momentum on the streets.

The attraction of Corbyn’s leadership on the Trotskyite left was to be expected, but is nevertheless painful to watch. Corbyn’s deal with ‘reasonable statesmenship’ is plainly visible, e.g. by the nomination of the right-wingers (and pro-Syria military interventionists) Hilary Benn as shadow foreign secretary and Maria Eagle as shadow defence secretary. But that cannot shatter believes in the possible instrumentalisation of the parliamentary party for ‘socialist aims’, and people like John McDonnell (shadow chancellor) are able to make it seem plausible:

Apart from the usual Trotskyite tactics there are other avenues leading from the ‘radical’ left towards state politics and finally to a nation state perspective. The RMT (transport union) together with, amongst others, the SWP, Counterfire, CPGB call for a ‘left exit’ from the EU, blaming the EU for the privatisation of the railways, the austerity measures and all other evils. Recent RMT actions against take-over of Norther Rail by Arriva (a Deutsche Bahn subsidiary) involved raising the German flag over Manchester station and other nationalist gimmicks. This reminds us of the CWU (communications union) BT ‘pink elephant’ campaign against call centre outsourcing to India or recent GMB actions against use of Indian software workers on work visa for work at British Airways, where the trade union raised concerns for ‘national security’.

On the other side of the spectrum people like Paul Mason (‘Why is it kicking of everywhere’) explains to his favourite subject, the precarious professionals and creative class’, why it needs a strong (nation) state in order to make space for the innovative (green, grass-roots) ideas and reduce the parasitic influence of finance and corporations. His ideas of the importance of social media, horizontal organising, creative avangardes/elites is popular amongst the ‘autonomist fringe’ – and ‘directional demands’ (European minimum wage, basic income etc.) create the transmission between movement and parliament.

The rest of the left which is not enticed by the big political theatre unfortunately goes into hiding in local affairs – there is hardly any strategical debate from a revolutionary perspective.